The Cost of Bad Culture (via SparkLDN)

bySparkMEL

Most of us agree that culture is important. We’ve all read the studies claiming that organisations whose staff describe themselves as motivated and with high autonomy grow faster, are more profitable and survive longer. Conversely, I’m sure you’ve seen that the number 1 reason quoted as to why projects fail is ‘cultural problems’.

Which, when you think about it, is completely insane. Because there are lots of things we can’t control, from customer preferences to the state of the economy. But we can control the way we work – our culture.

Yet despite the fact we at some level know this. We don’t do it. We might spend thousands of pounds paying someone like me to craft a beautiful mission statement. Or hire designers to create lovely open office spaces. Or tweak the way bonuses work and policies and procedures. But none of these are our culture.

They’re not the fundamentals of how we work. Culture is how we behave and how we talk together. We are both created by it, and we create it. And changing something so fundamental to an organisation and to ourselves is often very difficult. Scary, even.

Blind to the true cost

Sure the benefits of a great culture sound good, but we focus on how difficult and painful fundamental change is. And all the time we are blind to the terrible cost and pain of what’s wrong with out culture.

The other day, I was asked at check-in to show the credit card I’d bought my ticket with. I produced it, but it wasn’t accepted. You see, I’d bought the ticket months before, had lost the card and my bank had issued a replacement. My new card, apparently, wasn’t good enough.

Much flurry and fussing ensued. I called my bank, went through security procedures and explained the situation. They offered to speak to the representative. No good. They offered to email or even fax a letter. No good.

The airline policy was that the original card – the lost card – must be produced. There was no alternative: no flight, no refund, nothing.

To say I was angry would be an understatement. The company representative knew that the ‘fraud check’ he was being asked to perform was meaningless given the full identification I could produce from my bank. He accepted that if I were able to produce a ‘stolen’ card, I would presumably be more likely to be a fraud risk. He told me that every flight, customers were not permitted to board for precisely the same reason. He clearly listened to a lot of shouting, angry people. He wished the policy could be changed. That people could be made aware of it in an email (rather than on page 3 of the small print terms and conditions). He shrugged his shoulders helplessly.

In between stroppy tweets, I found time to muse on what I was seeing. To some it might have seemed as if this situation was poor customer service. But it wasn’t. This poor man didn’t want to be disobliging. He wasn’t pleased to be ruining holidays and business trips. Instead this was the symptom of a broken culture. It was the inevitable result of a command and control, inflexible hierarchy.

At the frontline, a contracted customer service officer, held some important knowledge about a problem that was hurting customers and company. He was even able to think of solutions to the problem – give customers advance warning or create a more flexible policy that still offered genuine protection against fraud. And yet he was completely powerless to make any change whatsoever. Nor was there any channel by which he could communicate his knowledge to those who did have power. Meanwhile one department at HQ presumably continued to view their fraud policy was a success, while a separate one defended the company against any complaints.

The result was misery for the employees on the frontline and furious customers. That eventually translates to high staff turnover, low morale, a poor reputation, low customer loyalty, lost sales… These are heavy costs.

What would change look like?

Faced with the symptoms – staff leaving, bad reviews and complaints – most companies think of superficial fixes. But since incentive schemes, loyalty programmes and an active social media manager don’t address the root cause, they make no real difference. Even companies that learn to react to specific feedback from customers or employees – in this case refining a fraud policy or communicating a warning in advance – only succeed in fixing a single instance of a deeper problem.

The real root cause is about a lack of autonomy – an inability to let staff make decisions according to their own judgement, or swiftly react to circumstances. How would a company change that? How would they shift from control to trust?

For most, the idea of changing something so fundamental is almost impossible.

It is why so many companies waste so much time and money in ‘transformations’ that change nothing except the jargon from the latest consultancy… Real cultural change only occurs when the need is so desperate that even revolution seems preferable to collapse. Of course by then, it’s often too late.

If only, I often think, people and companies could stop thinking of culture as some fluffy, intangible and instead think hard about their operational dysfunctions – where they come from and what they truly cost.

This post was written by #SparkLDN’s Helen Walton and can also be seen here.

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1 Comment on "The Cost of Bad Culture (via SparkLDN)"

Great article Helen. What I find odd is that companies roll their eyes when you put the words 'business' + 'culture' in the same sentence but don't make the connection to what drives behaviour and decisions. I wrote this article (https://www.linkedin.com/pulse/5-ways-business-culture-impacts-employee-engagement-results-jones?trk=mp-author-card) to illustrate because it became clear that the dots are floating around but aren't recognized as part of a larger dynamic that tracks back to culture.